Rating: Neutral | Target Price Range: RMB 55–65 | Current Price: RMB 75.68 (Close 2026-07-23) | Margin of Safety: −22% (base case low vs current price)
Time Horizon: 12 months | Total Shares Post-IPO: 223.8391 million | Market Cap: ~RMB 16.94 billion
Zhongke Instrument is the undisputed domestic leader in China's semiconductor dry vacuum pump industry – the only Chinese company achieving volume application in advanced process nodes (14nm logic / 128-layer 3D NAND). The company is at a dual structural inflection point driven by AI boosting advanced process pump count per tool and the accelerated S-curve of domestic substitution, giving it a clear long-term growth narrative. However, reported net profit attributable to parent is severely distorted by fair value changes of equity holdings (87.8% of 2025 net profit from non-recurring items), gross margin has declined for three consecutive years, and the current price of RMB 75.68 already implies ~63x 2027E adjusted P/E – even if growth materializes, the margin of safety at current levels is insufficient. Initiate with a Neutral rating and recommend reassessment after a pullback to below RMB 60.
This is an initiation coverage. No prior conclusion to compare.
Key Evidence:
- Zhongke Instrument Investor Relations Activity Record (2026-06-16, Announcement No. 2026-049) / Q2 Response: "The company has now passed testing and verification for 14 of the total 28 process categories in advanced process moderate and harsh process segments. For the remaining 14 process categories not yet tested... all testing and verification work is expected to be completed sequentially by Q4 2026."
- Zhongke Instrument Prospectus / Business and Technology Section: "The company has achieved coverage of all mature process categories, advanced process clean process, and some process categories in advanced process moderate and harsh processes."
- Soochow Securities New Stock Report (2026-04-24) / Industry Position: "Has passed testing and verification at TSMC, Dalian Intel, and SK Hynix, achieving small-volume shipments."
The company enjoys a clear first-mover advantage among domestic competitors: Hanbell Precise Machinery (002158) is still in the early introduction phase for semiconductor vacuum pumps, and other domestic players like Tongjia Hongrui have not yet entered advanced process verification. However, "full-process coverage" is contingent on completing all verifications by Q4 2026 – verification delays are a key downside risk.
Key Evidence:
- SEMI Mid-Year Equipment Forecast (2026-07-17): Global semiconductor equipment sales 2026E $165.9B (+23%), 2028E $229.5B.
- QYResearch / cited in Zhongke Instrument Prospectus: 2024 global IC dry vacuum pump market ~RMB 12.574B, China ~RMB 5.211B; 2026–2032 global CAGR ~10.14%.
- Bernstein China WFE Competitive Landscape Report (cited by Yicai): Localization rate rose from 16% in 2024 to 21% in 2025, expected to reach 26% in 2026.
- Industry Research (this report): Advanced process (sub-14nm) requires ~8–12 dry pumps per etch/deposition tool, 100–150% increase vs. 3–5 pumps for mature process; 3D NAND migration to 400+ layers multiplies etch/deposition steps.
- Consensus sell-side estimates: Revenue 2026E RMB 1.60–1.68B, 2027E RMB 2.20–2.37B, 2028E RMB 2.90–2.99B, implying CAGR ~28–29% (Flush F10).
Demand math supports high growth: YMTC Phase 3 volume production in 2H26 (adding 100k wpm capacity), CXMT's IPO raising RMB 66.6B for expansion – Zhongke Instrument, as the largest domestic dry pump supplier (2024 domestic semiconductor dry pump market share 12.72%, #1 domestic), will directly benefit. However, the 25–35% CAGR assumption depends on capacity ramp pace and customer qualification speed, and bears point to the collapse of solar business (from RMB 176M in 2023 to just RMB 30K in 2025 H1) meaning the company is highly concentrated in a single semiconductor track, reducing cyclical resilience.
Key Evidence:
- Zhongke Instrument Prospectus / Significant Risk Factor: "As of Dec 31, 2025, the company held 1.52% of Piotech shares and 0.80% of Zhongke Information shares, with total fair value of RMB 1,486.8869 million, accounting for 39.57% of total assets at period end."
- Zhongke Instrument Prospectus / Non-recurring Profit/Loss Analysis: Net non-recurring profit/loss in 2025 was RMB 740.8858 million, representing 87.80% of net profit attributable to parent.
- Zhongke Instrument Prospectus / Risk Factors: "During the reporting period, government subsidies recognized in current profit/loss were RMB 54.8559 million, RMB 123.4175 million, and RMB 130.0960 million respectively."
- 2026 Q1 Report: Adjusted net profit RMB 26.99 million (+1,374%), turned positive on adjusted basis.
2025 reported net profit attributable to parent of RMB 844M vs. adjusted RMB 103M – the difference of RMB 741M almost entirely from fair value changes of holdings like Piotech. Government subsidies of RMB 130M far exceeded adjusted profit of RMB 103M (126% ratio). Even excluding non-recurring subsidies, the remaining recurring subsidies still significantly support earnings. Investors evaluating Zhongke Instrument must anchor on adjusted net profit; reported net profit has very limited reference value.
Key Evidence:
- Zhongke Instrument Prospectus / Significant Risk Factor: "During the reporting period, overall gross margins were 33.02%, 29.44%, and 26.78% respectively."
- Zhongke Instrument Investor Relations Activity Record (2026-06-16) / Q2: "In process segments where our existing product models are already in volume supply, these companies (Edwards/Ebara) have taken the initiative to lower prices to capture more market share."
- Zhongke Instrument 2026 Q1 Report: Q1 gross margin 31.79% (QoQ +5.01pp), but single quarter volatility is high; whether this is a trend inflection remains to be seen.
- Flush F10: Average price of Roots dry pumps fell from RMB 96,000/unit in 2023 to RMB 84,800/unit in 2025 (−11.7%).
The gross margin decline results from a combination of foreign competition strategy and product mix shifts. The Q1 2026 rebound deserves attention – possibly from initial scale effects or a higher proportion of high-end products – but one quarter of data is insufficient to declare a trend reversal. Edwards has ~38% global market share, Atlas Copco's vacuum business operating margin exceeds 20%, giving them much greater room for price cuts than Zhongke Instrument. If the price war intensifies, gross margin could face further pressure.
Key Evidence:
- This report's valuation estimate: Probability-weighted fair value under three scenarios ~RMB 58 (30%×26.5 + 45%×59 + 25%×95), ~23% below current price of RMB 75.68.
- Consensus sell-side estimates (Flush F10): 2027E adjusted EPS ~RMB 1.20, implying PE of 63x; PEG (3-yr adjusted CAGR ~46%) ~1.37.
- Peers: Hanbell PE(TTM) 29x, Ebara 34x, Atlas Copco 36x, domestic semiconductor equipment peer median PE ~78x (Huayuan Securities).
- PS perspective: 2027E PS ~7.2x, below equipment peer average of 14.9x, PS-based valuation appears reasonable.
Bears argue that using the peer median PE of 78x implies a 2027E target of RMB 93.6, above current price. We believe 78x benchmarks against A-share equipment leaders like NAURA/AMEC/Piotech, which have superior liquidity, institutional coverage, and earnings stability compared to a BJSE new stock like Zhongke Instrument – simply applying 78x is inappropriate. Our base case uses a 50x exit PE (anchored to Ebara's 34x plus domestic substitution and growth premium), which is more prudent than the market's optimistic view.
Key Evidence:
- Zhongke Instrument Investor Relations Activity Record (2026-06-16) / Q2: Remaining 14 process categories "all testing and verification work is expected to be completed sequentially by Q4 2026. Once testing and verification procedures are completed, the company will be ready for volume delivery."
- Great Wall Securities Report (2026-05-27): YMTC Phase 3 mass production in 2H26, adding 100k wpm capacity.
- Zhongke Instrument Announcement on Sale of Equity Securities (2026-06-01): Plans to sell up to 1 million shares of Piotech.
- Zhongke Instrument Prospectus / Business and Technology: "The qualification cycle for a specific vacuum pump model can cumulatively reach 2–3 years."
Bears point out: verification completion does not immediately translate to revenue – customer qualification still takes time (prospectus states 2–3 years). Q4 verification completion contributes almost nothing to 2026 results. Piotech stake reduction is non-recurring income and, following this report's C3 logic, should not be viewed as a core catalyst for value re-rating. We believe the signaling value of full-process verification completion (breaking the expectation of foreign monopoly pricing in harsh processes) outweighs its short-term financial contribution.
| Metric | FY2023 | FY2024 | FY2025 | 2026 Q1 |
|---|---|---|---|---|
| Revenue (RMB Bn) | 0.852 | 1.082 | 1.291 | 0.256 |
| Revenue YoY | — | +27.1% | +19.3% | +38.9% |
| Net profit attributable to parent (RMB Bn) | 0.600 | 0.193 | 0.844 | 0.172 |
| Adjusted/Recurring net profit (RMB Bn) | 0.073 | 0.088 | 0.103 | 0.027 |
| Adjusted net profit YoY | — | +20.4% | +17.2% | +1,373.6% |
| Gross margin | 33.02% (prospectus) | 29.44% (prospectus) | 26.78% | 31.79% |
| Adjusted net margin | 8.6% | 8.1% | 8.0% | 10.5% |
| Operating cash flow (RMB Bn) | 0.047 | 0.177 | 0.192 | −0.054 |
| Free cash flow (RMB Bn) | — | — | ~0.161 | −0.060 |
| Cash + trading financial assets (RMB Bn) | — | — | 2.179 | 2.275 |
| Interest-bearing debt (RMB Bn) | — | — | — | 0.227 |
| Debt-to-asset ratio (consolidated) | — | — | 34.17% | 32.13% |
| Net debt/EBITDA | — | — | — | Negative (net cash) |
Note: FY2023/FY2024 partial data from prospectus citations, 2023–2024 gross margins are disclosed values (33.02%/29.44%). FY2025 adjusted net profit of RMB 103M, government subsidies RMB 130M. Q1 adjusted net profit RMB 26.99M YoY +1,374%, mainly due to extremely low base in prior year period (−RMB 2.12M). The "Recurring net profit" line uses adjusted net profit attributable to parent (company does not separately disclose Non-GAAP adjusted net profit).
Key Metric Changes (YoY ≥ ±20%):
Zhongke Instrument reported 2026 Q1 revenue of RMB 256M (+38.9% YoY), exceeding the upper end of the prospectus forecast range (RMB 250M). Adjusted net profit of RMB 26.99M (+1,373.6%) also beat the upper end of the forecast (RMB 23M). However, the beat is largely due to a low base – adjusted net profit in 2025 Q1 was only −RMB 2.12M.
Core Contradiction: Of the Q1 reported net profit attributable to parent of RMB 172M, RMB 166M came from fair value changes of held Piotech and other stocks (trading financial assets reached RMB 1.586B at end-Q1). The adjusted net profit of RMB 26.99M, while a significant turnaround YoY, annualizes to ~RMB 108M, only slightly above FY2025 full-year adjusted profit of RMB 103M. The core business growth rate is not as impressive as the reported net profit number suggests.
Positive Signals: ① Contract liabilities increased from RMB 183M at end-2025 to RMB 232M at end-Q1 (+27%), confirming a healthy order backlog; ② Gross margin of 31.79% rebounded sharply QoQ (FY2025 full year 26.78%), which would improve the earnings model if sustained; ③ Sales collection improved, operating cash flow of −RMB 54M (YoY +53.1%), narrowing the deficit.
Comparison to Market Expectations: Consensus sell-side estimate for FY2026 adjusted net profit is ~RMB 229M (Flush F10). Q1 adjusted net profit of RMB 26.99M represents only 11.8% of the full-year estimate, mainly due to revenue seasonality (Q1 is typically a low season; FY2025 full-year adjusted net profit of RMB 103M had Q1 at −RMB 2.12M). Management did not provide a full-year guidance.
Zhongke Instrument is a heavy-asset precision manufacturing company, primarily engaged in dry vacuum pumps (Roots type) for semiconductor wafer fabrication, supplemented by vacuum scientific instruments, maintenance services, and supporting equipment like Chillers/Scrubbers. Downstream covers integrated circuits (91% of revenue), solar (significantly shrunk), and scientific research. Sales are mainly direct, with customers including YMTC, CXMT, SMIC and other major domestic fabs, as well as TSMC, Intel, SK Hynix (small volume verification shipments).
Revenue Characteristics: Dry vacuum pump sales are one-time equipment revenue; maintenance and service (10.6% of revenue) is recurring. Product qualification cycles are 2–5 years, with high customer stickiness and high switching costs.
Pricing Power: Some bargaining power in mature/clean process segments already in volume supply, but constrained by Edwards/Ebara in advanced process harsh segments – the company's IR record states that foreign competitors in volume-supplied process segments have taken the initiative to lower prices to capture more market share.
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| OCF / Adjusted net profit | 0.65x (est.) | 2.01x (est.) | 1.86x (est.) |
| FCF / Adjusted net profit | — | — | ~1.56x (est.) |
Using adjusted net profit as denominator, OCF/adjusted was stable at 1.8–2.0x in 2024–2025, FCF/adjusted ~1.56x – core business cash generation is adequate and genuine. Using reported net profit as denominator is severely distorted (FY2025 OCF/reported only 0.23x).
Recurring Earnings Test: FY2025 adjusted net profit RMB 103M vs. reported RMB 844M – gap of RMB 741M from non-recurring items (mainly equity fair value changes). Core earnings are actually around RMB 100M level. Government subsidies of RMB 130M (including both recurring and non-recurring portions) far exceed adjusted net profit of RMB 103M.
Estimated ROIC: Adjusted net margin ~8% × Asset turnover ~0.33 ≈ 2.6%, below WACC (~10%). The low ROIC is mainly due to ① large asset base from equity holdings (trading financial assets RMB 1.586B, generating no operating profit); ② capacity utilization still ramping (90.55% in 2025). Excluding financial assets, operating ROIC is estimated at 7–9%, close to but not significantly exceeding cost of capital.
CapEx / depreciation data not fully disclosed. In Q1 2026, cash paid for long-term asset acquisition was RMB 6.12M, annualizing to ~RMB 24.48M, acceptable relative to adjusted profit scale. The Nantong base project will increase CapEx over the next 3–4 years.
Moat Sources: ① Chinese Academy of Sciences background + technological accumulation from three National 02 Special Projects; ② Customer barriers from passing TSMC, Intel, SK Hynix verification (2–5 year qualification cycle); ③ Database of 1,500+ application processes; ④ Endorsement effect from Phase II of the National Big Fund holding 19.73%.
Red Flag Signals:
| Commitment | Actual | Verdict |
|---|---|---|
| Prospectus 2026 Q1 forecast: Revenue RMB 230–250M, adjusted net profit RMB 19–23M | Actual revenue RMB 256M (above upper bound), adjusted net profit RMB 26.99M (above upper bound) | ✅ Delivered |
| Advanced process testing/verification: complete all 28 categories by Q4 2026 | As of 2026-06-12, 14 completed (50%) | ⚠️ Partial delivery, progress trackable |
| Historical: 2018 accounting error retrospective adjustment (net profit cut 41%), 2019 fundraising usage violation, 2022 related-party transaction without deliberation | All rectified, not constituting major violations | ⚠️ Rectified, but internal control awareness weak |
Overall Assessment: Management is pragmatic on earnings guidance (conservative guidance, exceeding expectations), but historical internal control deficiencies (three oral warnings from NEEQ in three years) suggest governance compliance needs improvement.
Overall Assessment: Shareholder friendliness neutral – stable dividend record pre-IPO, but IPO dilution sizeable and historical related-party transaction violation is a blemish.
Revenue composition of Zhongkeyi (Zhongke Instrument) for FY2025 (from the prospectus):
| Segment | Revenue Share | YoY Growth | Business Logic |
|---|---|---|---|
| Dry Vacuum Pumps | 64.70% | +6.6% | Core business, serving IC wafer fabrication (etching/thin-film deposition/ion implantation, etc.), mainly direct sales |
| Vacuum Scientific Instruments & Equipment | 18.46% | +35.8% | Thin-film deposition equipment + key components for large scientific projects, non-standard customized, higher gross margin |
| Repair & Maintenance Services | 10.61% | +74.5% | Pump repair and maintenance (operated by Shanghai Shangkaiyi), recurring revenue, high gross margin |
| Parts & Others (Chiller/Scrubber/Integrated Systems) | 6.23% | +81.8% | New products such as Chiller/Scrubber/Integrated Systems. Integrated systems are a domestic leader, with nearly 100 units installed globally cumulatively |
Key profit segment: Dry vacuum pumps contribute the majority of gross profit (64.7% revenue share, based on overall gross margin of 26.78%). However, note that gross margins for vacuum scientific instruments & equipment and repair & maintenance services are typically significantly higher than those of dry pumps (non-standard customized + service nature), so their profit contribution share may be higher than their revenue share.
Gross margin structure differences: The company does not disclose segment-level gross margins (the prospectus only provides the overall gross margin). Based on industry norms: repair & maintenance services typically have gross margins of 40–50%, scientific instruments & equipment 30–40%, dry vacuum pumps 25–30%, and parts/new products may be lower as they are still in the investment phase.
Key trends: Repair & maintenance service growth (+74.5%) far exceeds equipment sales growth (+6.6%). The service revenue share increased from ~5.6% in 2023 to 10.6% in 2025—a rising proportion of recurring revenue helps smooth cyclical fluctuations, representing a positive business model evolution.
| Item | Severity | Evidence |
|---|---|---|
| Non-recurring gains/losses account for a very large share | 🔴 High | FY2025 non-recurring net income of 741 million yuan, accounting for 87.80% of net profit attributable to parent (prospectus) |
| Government subsidies far exceed recurring net profit | 🟡 Medium | FY2025 government subsidies recognized in profit/loss were 130 million yuan, exceeding recurring net profit of 103 million yuan; if subsidies decline by 50%, recurring net profit would fall to ~38 million yuan |
| Sharp increase in inventory impairment reserves, abnormal proportion of backup pumps | 🟡 Medium | Inventory impairment balance increased from 49.23 million yuan to 60.95 million yuan (2023→2025); backup pump impairment share rose from 21.55% to 43.08% |
| Historical internal control deficiencies | 🟡 Medium | Three oral warnings from the NEEQ: retrospective accounting error correction (2018 net profit reduced by 41%), fundraising irregularities (added implementation entities without following decision-making procedures), unapproved related-party transactions |
| Indicator | Multi-Year Data | Consistency with Management Explanation |
|---|---|---|
| Gross margin trend | 33.02% (FY2023, prospectus)→29.44% (FY2024, prospectus)→26.78% (FY2025), declining for 3 consecutive years | ✅ Consistent—each period attributed to market competition leading to lower selling prices |
| Government subsidies / recurring net profit ratio | 54.86 million→123.42 million→130.10 million (prospectus), growth rate far exceeding recurring net profit growth | ⚠️ The company did not explain the reason for the ratio change |
| Sharp fluctuations in net profit attributable to parent | 600 million→193 million→844 million→172 million (Q1), entirely driven by fair value changes of shareholdings | ✅ Consistent—each period explained as fluctuations in the stock prices of Tuojing Technology / Zhongke Information |
| Item | Value |
|---|---|
| Stock Price (2026-07-23 close) | 75.68 yuan |
| Total Shares Outstanding | 223.8391 million shares |
| Market Cap | ~16.94 billion yuan |
| Net Cash (Cash − Interest-Bearing Debt) | ~462 million yuan (2.07 yuan/share) |
| PE (TTM, attributable to parent) | ~17x (highly distorted, not referable) |
| Forward PE (FY2027E recurring) | ~63x |
| PS (FY2027E) | ~7.2x |
| PEG (3-year recurring CAGR ~46%) | ~1.37 |
Note: PE (TTM) of only ~17x is because TTM net profit attributable to parent includes approximately 750 million yuan in fair value gains, which is not representative of true earning power. Valuation should be based on recurring net profit.
| Company | PE (TTM) | PB | Revenue Growth | ROE | Remarks |
|---|---|---|---|---|---|
| Zhongkeyi (920186) | ~17x (distorted) / 63x (FY2027E recurring) | — | +19.3% (FY2025) | — | Domestic semiconductor dry pump leader |
| Hanbell Precise (002158) | 29x | 3.07x | −20.3% (FY2025) | 10.9% | Primarily photovoltaic vacuum pumps, in semiconductor introduction phase |
| Ebara (6361.T) | 34x | 5.0x | +10.6% (FY2025) | 16.3% | Global top-3 semiconductor pump maker |
| Atlas Copco (ATCOA) | 36x | 8.6x | +0.7% (FY2025) | 25.7% | Edwards parent, global leader |
Zhongkeyi's FY2027E recurring PE of 63x is significantly above international peers (29–36x) but below the A-share semiconductor equipment median (78x). The difference mainly stems from a growth premium: Zhongkeyi's 3-year recurring CAGR ~46% vs. international peers 10–23%.
The current price of 75.68 yuan (16.94 billion market cap) implies that the market believes the company's recurring net profit will grow from 103 million yuan (FY2025) to approximately 400 million yuan (16.94 ÷ 42x reasonable PE) within 2–3 years, i.e., a 3-year CAGR of about 57%.
Two-way check:
| Layer | Per-Share Value | Description |
|---|---|---|
| Asset Value (Floor) | ~15.3 yuan | Book value (including financial assets) liquidation reference |
| EPV Zero-Growth | ~6.9 yuan | Based on annualized recurring EPS of 0.48 yuan from Q2026, WACC 10% |
| Growth Option | ~68.8 yuan (91% of current price) | Current price − EPV |
The current price is almost entirely supported by the growth option. For a company at a structural inflection point, EPV-zero-growth is a floor, not a final judgment—a high growth-option ratio does not equal overvaluation, but it means minimal margin for error (if growth is disproven, a drawdown to near EPV would imply >90% decline).
| Scenario | Probability | Fair Value Range | vs. Current Price | Key Determinant |
|---|---|---|---|---|
| 🐻 Bear | 30% | 23–30 yuan | −60% ~ −69% | Memory expansion disproven, advanced node validation delayed, gross margin falls below 22% |
| 📊 Base | 45% | 55–65 yuan | −14% ~ −27% | Expansion proceeds as planned, market share rises from 12.7% to 20%, FY2028E recurring net profit 2.5–2.8 billion yuan, exit PE 50x |
| 🐂 Bull | 25% | 90–100 yuan | +19% ~ +32% | AI demand exceeds expectations, overseas volume accelerates, recurring net margin expands to 15%+, FY2028E recurring net profit 4.0 billion yuan, exit PE 55x |
Reference: the most conservative published forecast (Kaijun Securities, Zhu Haibin, 2026-06-12) gives FY2027E recurring net profit of 264 million yuan. The Bear case assumes FY2028E recurring net profit of ~150 million yuan (CAGR 13%), corresponding to PE 35x (regression to international peer median) → fair ~23.5 yuan/share, which is lower than the most conservative sell-side forecast's implied valuation, representing a stress-test scenario.
The Base case exit PE of 50x is between international peers (Ebara 34x, Atlas Copco 36x) and the A-share semiconductor equipment median (78x), reflecting the import-substitution premium and growth characteristics—Zhongkeyi's recurring growth rate is about 2–3 times that of international peers, warranting a corresponding multiple expansion.
| Source | FY2026E Revenue | FY2026E Recurring Net Profit | FY2027E Revenue | FY2027E Recurring Net Profit |
|---|---|---|---|---|
| This Report Forecast | 1.6–2.0 billion yuan | 120–180 million yuan | 2.3–2.9 billion yuan | 180–280 million yuan |
| Consensus Estimates | 1.60–1.68 billion yuan | 226–233 million yuan | 2.20–2.37 billion yuan | 260–280 million yuan |
| Management Guidance | No full-year guidance | No full-year guidance | — | — |
Our FY2026E recurring net profit is below consensus, mainly because we believe Q1 recurring net profit of 26.99 million yuan (annualized only 108 million yuan) and the sustainability of the H1 gross margin recovery require further verification.
Valuation Assessment: Overvalued. The current price of 75.68 yuan is at a 23% premium to the probability-weighted fair value of approximately 58 yuan. Risk/reward is asymmetric to the downside. From a P/S perspective (FY2027E ~7.2x vs. equipment peers median 14.9x) there is still some room, but the recurring PE of 63x already fully reflects medium-term growth. A good company is not necessarily a good price—the current level lacks a margin of safety. We suggest waiting for a pullback to below 60 yuan (near the Base case lower bound).
The global dry vacuum pump market for integrated circuits (ICs) in 2024 was approximately 12.574 billion yuan (12.57 million units), of which the China market was approximately 5.211 billion yuan (5.21 million units) (source: Zhongkeyi prospectus citing QYResearch). The global semiconductor dry pump market in 2025 is approximately 1.68 billion USD (~12.1 billion yuan), with a 2026–2032 CAGR of ~10.14% (source: Global Growth Insights).
Structural demand inflection (triggering the 1.8 framework): Beyond market size growth, three structural changes are re-pricing Zhongkeyi's demand:
Quantified chain: China IC dry pump market 5.211 billion yuan (2024) × localization rate from 28%→40% (2026E–2030E) × Zhongkeyi domestic share 50–60% = Zhongkeyi IC dry pump revenue 730 million–1.25 billion yuan. Adding maintenance services + overseas + new products, total revenue in 2028 could reach 2.0–3.0 billion yuan.
Upstream: Precision machined parts (rotors, pump bodies, bearings), motors & variable frequency drives, seals, coating materials. High-end bearings and seals are still partially imported, with domestic localization below 30%. Supplier bargaining power is moderate. Midstream: Dry vacuum pump manufacturing and system integration—Zhongkeyi covers the entire chain from pump body design, rotor machining, to assembly and testing. Downstream: Semiconductor equipment OEMs (NAURA, AMEC, Tuojing, etc.) and wafer fabs (SMIC, YMTC, CXMT, etc.).
In terms of value distribution, Zhongkeyi sits in the midstream manufacturing segment, with gross margins of ~27–33% (lower than Edwards' ~40–45%) but higher than typical domestic component makers.
Concentration: Global semiconductor vacuum pump CR5 is approximately 78.4% (Edwards ~38%, Pfeiffer ~22%, Ebara ~15%, Kashiyama ~10%, Anest Iwata, etc.). In China's IC dry pump market, the top 3 (international players) account for ~70%+, and domestic manufacturers as a whole hold ~28%.
Zhongkeyi's position: In 2024, its domestic semiconductor dry pump market share was approximately 12.72% (number one domestically). It is the only domestic supplier covering both 14nm logic and 128-layer 3D NAND advanced processes.
Entry barriers: Very high. ① Technology barriers—must cover clean/medium/harsh all processes and be validated for sub-14nm nodes. ② Customer qualification barriers—wafer fab validation cycles of 2–5 years. ③ Capital barriers—single production line investment of several hundred million yuan. ④ Brand barriers—built by international players over decades.
Domestic competition: Hanbell Precision is strong in photovoltaic vacuum pumps (FY2025 revenue −62.8% impacted by solar cycle); its semiconductor pumps are still in the introduction phase. Tongjia Hongrui, Baosi, etc. are trying to enter but have not yet broken into advanced processes. In the short term, Zhongkeyi faces virtually no effective domestic competitor in the advanced-node import substitution track.
Cycle phase: Global semiconductor equipment is in an AI-driven super upcycle—SEMI predicts 2026 global equipment sales of 165.9 billion USD (+23%), reaching 229.5 billion USD by 2028. China's semiconductor equipment localization is in the acceleration phase of the S-curve.
Policy direction: Strongly positive. ① US BIS export controls continue to tighten, forcing import substitution. ② National Big Fund Phase III of 344 billion yuan focuses on equipment/materials/components. ③ First-set subsidy policies (30–50% of equipment price) reduce the risk for wafer fabs adopting domestic equipment.
| Company | Revenue Scale | Revenue Growth | Gross Margin | ROE | Market Share/Standing | Key Difference from Zhongkeyi |
|---|---|---|---|---|---|---|
| Zhongkeyi | 1.291 billion yuan (FY2025) | +19.3% | 26.78% | — | Domestic semiconductor dry pump 12.72%, #1 domestic | Only domestic supplier in mass production for advanced nodes |
| Hanbell Precise | 2.927 billion yuan (FY2025) | −20.3% | 34.11% | 10.9% | Domestic PV vacuum pump leader | Semiconductor pumps still in introduction phase |
| Ebara | ~47 billion yuan (FY2025) | +10.6% | Operating margin 11.9% | 16.3% | Global semiconductor pump 10–15% | Global giant, revenue 36x Zhongkeyi |
| Atlas Copco/Edwards | ~113 billion yuan (FY2025) | +0.7% | Operating margin 20.3% | 25.7% | Global semiconductor pump ~38% | Absolute global leader |
Positioning: Absolute domestic leader in semiconductor dry vacuum pumps, global follower. Core moats: ① CAS background + three national 02 Special Projects + three national-level R&D platforms. ② Passed validation by TSMC, Intel, SK Hynix (only domestic supplier). ③ Database covering 1,500+ process applications. ④ Big Fund Phase II holds 19.73% share. Market share trend: ~8% (2022)→12.72% (2024), continuously rising.
Market share definition note: The company's prospectus cites QYResearch's estimate of the domestic IC dry pump market at 5.211 billion yuan (2024). The company's IC dry pump revenue was 663 million yuan, giving a self-calculated market share of 12.72%. This is value-based and covers only the IC segment. Third-party institutions (such as QYResearch's global ranking tables) may use different scopes (including PV/all end markets), so rankings may differ.
Zhongkeyi has excellent fundamentals—the only domestic dry pump supplier in mass production for advanced nodes, deeply tied to two major memory customers (YMTC, CXMT), and backed by the Chinese Academy of Sciences and the Big Fund. The company is at a dual structural inflection point: AI-driven advanced-node pump allocation doubling and import substitution S-curve acceleration. The 3–5 year growth narrative is clear.
However, the current price has fully or even excessively priced in this growth story: at 75.68 yuan, it corresponds to FY2027E recurring PE of 63x. The probability-weighted fair value of the three scenarios is approximately 58 yuan, implying a 23% premium. Downside risk (Bear case −60% to −69%) far exceeds upside potential (Bull case +19% to +32%), with asymmetric risk/reward to the downside.
Strategy recommendation: Initiate with a "Neutral" rating. A good company is not necessarily a good price—we suggest waiting for either of the following triggers to re-evaluate entry: ① share price pulls back to below 60 yuan (near Base case lower bound); or ② FY2026Q4 official completion of full-process validation and H1 2027 financial results verifying recurring net margin improvement to 10%+.
This report is prepared based on public information and does not constitute investment advice. Valuation estimates involve subjective assumptions; actual results may differ from projections. Report date: 2026-07-24.